FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd and Woolworths Limited [2006] FCA 826
NSD 769 of 2003
SUMMARY
ALLSOP J
30 JUNE 2006
SYDNEY
SUMMARY
This summary is given for the benefit of the parties and the public, in particular because of the temporary restriction on the distribution of my reasons. None of this summary should be taken as any part of the reasons for judgment. This summary is made by way of information only. The reasons for judgment are contained in the eight hundred and thirty eight (838) paragraphs which I will publish today with restrictions on distribution.
In this matter, the Australian Competition and Consumer Commission (the “Commission”) instituted proceedings against Liquorland (Australia) Pty Limited (“Liquorland”) and Woolworths Limited (“Woolworths”) in respect of asserted contraventions of Part IV of the Trade Practices Act 1974 (Cth) (the “Act”). In particular, it was asserted by the Commission that there had been contraventions of s 45(2)(a) and (b) of the Act. The claims of contravention were that both Liquorland and Woolworths had made contracts or arrangements or arrived at understandings in circumstances where the contracts, arrangements or understandings contained exclusionary provisions as defined in s 4D of the Act and that those provisions had been given effect to.
It was further asserted that both Liquorland and Woolworths had made contracts or arrangements or arrived at an understandings in circumstances where provisions of the contracts or arrangements or understandings had the purpose of substantially lessening competition, and that these provisions had been given effect to.
The claims by the Commission concerned four episodes in suburban Sydney and Tweed Heads in connection with the application for liquor licences by third parties. The four episodes were at Campbelltown, Arncliffe/Rockdale and Tweed Heads (there being two at Tweed Heads). In respect of each episode a party, unrelated and hitherto unknown to Woolworths and Liquorland, applied for a liquor licence under the relevant New South Wales statute, the Liquor Act 1982 (NSW). Woolworths and Liquorland had, or proposed to have, a takeaway liquor store in the immediate vicinity (within no more than five kilometres) of the business proposed by each such party. In each case, Woolworths and Liquorland availed themselves, or threatened to avail themselves, of a right that the Liquor Act gave to persons in their position to object to the grant of the licence that had been applied for. In each case, after negotiation with the applicant for the licence, the objection, or threatened objection, was withdrawn. In each case this withdrawal came at a price, though not one easily measured in money. The price was embodied in the deeds at the centre of these proceedings. In the deeds, the third parties agreed to restrictions being placed on the respective liquor licences anticipated to be granted and so on the operation of the respective businesses to be carried on under the licences. Woolworths and Liquorland were satisfied with these restrictions and withdrew their objection, or threats of such.
Liquorland and the Commission settled their proceeding. In their settlement, Liquorland and the Commission agreed that Liquorland had contravened the Act in that the relevant provisions of the deeds contained exclusionary provisions, that is, contained provisions between two or more persons who were competitive with each other and the provisions had the purpose of preventing, restricting or limiting the supply of goods to particular persons or classes or persons. The agreement between the Commission and Liquorland that there had been contraventions in respect of all four episodes led to penalties being imposed on Liquorland by another Judge of the Court after the parties placed before that Judge an agreed regime for orders.
It should be noted that Liquorland refused to accede to the proposition consensually that there had been a contravention by it of s 45(2) by the provisions having the purpose of substantially lessening competition. The Commission was prepared to settle with Liquorland on the basis that there was no finding against Liquorland of contravention of the Act in that regard.
Woolworths did not participate in that settlement. It denied any contravention of the Act in any respect. This proceeding therefore continued against Woolworths in respect of all four episodes on both bases of asserted contravention: the exclusionary provision basis and the purpose of substantially lessening competition basis.
The matter was heard by the Court over thirty-four days in 2005 concluding on 20 July 2005. Further submissions were made by the parties which concluded on 12 September 2005.
I have concluded that in respect of two of the four provisions there was a contravention by Woolworths of s 45(2) in respect of the exclusionary provision case. These episodes were Ettamogah at Campbelltown and Global Beer at Tweed Heads. (The parties will be familiar with the nomenclature.) I have also concluded that Woolworths contravened s 45(2) in respect of the purpose of substantially lessening competition case in respect of all four episodes. This conclusion is based on the assessment of all the evidence including the evidence of officers of Woolworths responsible for the events in question and after concluding that the relevant markets in which to assess the conduct of Woolworths for the sale of takeaway packaged liquor, were in these circumstances, and for this analysis, the local markets as pleaded by the Commission.
The conclusions that the provisions had the purpose of substantially lessening competition do not directly impugn Liquorland. The conclusions that I reached for the reasons that I have given were primarily based upon the purposes of the relevant Woolworths witnesses.
During the course of the hearing, a significant body of evidence was the subject of confidentiality orders made under power given by s 50 of the Federal Court of Australia Act 1976. In my reasons it has been necessary to repeat the substance of parts of the content of material in respect of which confidence was claimed and orders under s 50 were made. Much of this was market research material, which is now of some age. It has been possible to identify paragraphs where I think that confidential material exists and I have done so in the orders that I propose to make. However, I propose also to give the Commission and Woolworths, principally through their counsel and solicitors, an opportunity to read my reasons and to bring to my attention any inadequacy in my identification of paragraphs that may raise confidentiality issues. For this reason, I do not propose to make available to the public today any reasons for my orders. However, no later than early next week after the Commission and Woolworths have had an opportunity to assess the accuracy of my views as to likely paragraphs in respect of which confidence might be claimed, I will make available to the public a redacted version of my reasons.
The orders also contemplate a regime for interested parties claiming confidence in respect of certain paragraphs. Parties should understand that I will approach this task with far more rigour that I approached the granting of orders under s 50 during the course of the proceeding. It is one matter to deal with large amounts of information during the course of the trial in respect of which there is little reason why an outsider need have access to the business records of commercial parties. It is quite another to keep confidential from the public the reasons of a Judge of the Court for the exercise of the judicial power of the Commonwealth in settling a controversy. I will need to be persuaded why any part of the reasons that I have given are truly confidential, in particular given the passage of time since the creation of the documents in question and the passage of commercial events since that time.
Finally, I wish to state a matter referred to at the end of the reasons for judgment which it would be inappropriate to overlook in a summary such as this. The case was hard fought and detailed. However, may I express my genuine gratitude to senior counsel, counsel, solicitors and the parties and all who assisted in the conduct of the case, including experts, for the thorough and precise assistance which I received. Hard fought cases of this nature tend to be complex and detailed. This was no exception. The execution of my task was assisted by the careful and thorough manner in which the parties, their advisers and all concerned discharged their obligations.
Sydney, 30 June 2006
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